Friday, October 17, 2008
State Money Shock Coming; ABQ City Hall Hit Too; Tough Decisions Ahead, Plus: Plenty Of Action From The Jammed Campaign Trail
Crashing oil and and natural gas prices are blowing a hole in the New Mexico budget, delivering the first serious downside economic news since Big Bill assumed the governorship in 2003. Santa Fe insiders tell us the state will report next week that hundreds of millions of dollars of royalty revenue has vanished in the energy price decline.
"The Legislature now faces critical choices. They can decide to start spending the state's reserves--some $600 to $650 million---cut spending, or raise taxes," explained one in the know bean counter.
The most likely road taken will be to raid the reserve. Some of that money is tied up in hard to get at investments. But late Friday Governor Richardson moved to get ahead of the curve. He announced: "...An aggressive effort to identify $200-$300 million in stalled capital projects. The Governor will work with the Legislature to cut those stalled projects and shore up state revenue without raising taxes, tapping cash reserves or cutting services to New Mexicans."
It could be a pretty clever maneuver. If lawmakers protest and try to protect stalled pork projects, they could look irresponsible, just days before they stand for re-election. All 112 legislators are on the ballot in November. In addition, there is Ricrahrdson's concern over Obama carrying the state. Not acting on the fiscal crisis could raise doubts in voters' minds about the resolve of Democrats who are poised for gains here.
Richardson also announced that he would "immediately freeze certain spending and reduce operating expenses by 5-percent, saving $114 million." That's what state Senate leaders have been urging him to do.
Richardson confirmed the drastic shortfall in state revenues: "...Revenue for the ongoing 2009 budget year will be about $344 million lower than previous estimates.." The Governor also announced a hiring freeze effective November 15th.
How much further projected revenues could fall is anyone's guess. Follow the price of oil and natural gas. That will tell the tale.
We've often talked about how we have not seen Bill Richardson under financial pressure as governor, and even with a looming financial crisis, we still might not see much. If Obama is elected president and gives Richardson a job, the faltering economy and the hard choices in the state budget would fall to new Governor Diane Denish.
Financial tremblors are also being felt at ABQ's City Hall where the financial bind is getting tighter by the day. Insiders there now report the deficit for the current fiscal year is on track to reach a stunning $50 million as tax revenue declines in this consumer led recession. Some insiders say a deficit this size simply shows the city has been spending way too much. ABQ Mayor Marty Chavez could face major political fights with the city council if the deficit reaches that amount. The only way to save that kind of money may be to lay off city employees.
All the government money mavens are crossing their fingers that this slowdown reverses soon, but they are not holding their breath.
The slowdown has led Bernalillo County to cancel for now a controversial purchase of the old Petroleum Cub building downtown for use as county office space. County Commission Chairman Alan Armijo says the price of the property could decline because of the slow economy. The planned purchase was criticized as being too expensive. The county is taking other measures as well to save money in a falling economy.
By the way, there is chatter that Armijo, who is term-limited at the commission, may seek to get back on the ABQ city council. He is thinking about a run at Councilor Isaac Benton in District Three which is near downtown and includes the historic Barelas neighborhood. Armijo served two terms on the city council in the 90's. Benton is freshman councilor. The city election is under a year away now--in October 2009.
AD WITH A PUNCH
This ad from Dem US Senate candidate Tom Udall is drawing a lot of reaction. Some are calling it the best one they've seen this cycle, delivering a powerful emotional punch. Others say the ad may indeed be emotionally powerful, but can also be spun as an indictment of congressional Democrats for their failure to end the Iraq war. Rep. Udall is not a military veteran but he brings to the table his down the line congressional support for veterans. This ad, in 30 seconds and in a very personal way, makes that support tangible to the regular voter. Very interesting stuff. Here it is.....
CONGRESS CASH WRAP
Here's the wrap on all the cash for the congressional races for the September quarter. Harry Teague and Ed Tinsley, vying for the southern seat, each loaned himself $500,000. In ABQ, Dem Martin Heinrich raised $728,000. Didn't his campaign's news release the other day say it was $750,000? Did they lose $22,000 somewhere? Anyway, Heinrich out raised Republican Darren White who took in $554,000 in the quarter. White had more cash on hand than Heinrich Sept. 30. The sheriff reported $678,000 on hand and Heinrich had $327,000. White should be able to hold his own on TV spending in the final days, even though the national R's pulled a $500,000 ad buy they had planned. Heinrich is getting big support from national Dems and big labor, more than making up for White's cash advantage.
In the contest for New Mexico’s open US Senate seat, Rep. Tom Udall (D), out raised Rep. Steve Pearce (R) $1.8 million to $1.3 million.
Mixed feelings on the state GOP charges leveled this week that they have finally found actual votes cast in New Mexico that were fraudulent--not just fraudulent voter registration cards. They say they have sent their evidence to local law authorities.
The R's had a news conference led by ABQ GOP State Rep. Justine Fox-Young where she said alleged illegal votes may have been cast in the June Democratic primary, singling out 28 votes in the district of Rep. Dan Silva who was defeated. Why did it take the R's until the middle of the general election campaign to come forward with their "news?" Well, that's the political part. But if there is any evidence of voter fraud, we welcome the proof as Republican attorney Pat Rogers and others have been yelling fire in the theater over this issue for years, but have yet, to our knowledge, shown any illegal votes cast. Dems argue it is really about voter suppression.
Meanwhile, Fox-Young, 29, is expected to win a third, two year term to the NM House in November. The daughter of the late well-known NM lobbyist Charlie Young has allied herself with the current hierarchy of the state GOP, but observers say if she could demonstrate some independence, she could be a potential GOP congressional candidate for the moderate ABQ seat in 2010.
ED MAY MISS SARAH
We thought that the Sunday Roswell visit of GOP VP nominee would be a good opportunity for Southern GOP congressional candidate Ed Tinsley to rally the GOP base vote, but Tinsley has a live debate on KOAT-TV with Dem Harry Teague at 4 p.m. Sunday. Palin is scheduled for 2:30 in Roswell. That is going to make some tight scheduling for Ed. It doesn't look as though GOP US Senate candidate Steve Pearce will see Palin. He has fund-raisers scheduled in ABQ.
We mentioned this hard-hitting attack on Bush and Darren White by Martin Heinrich a day or so ago. We now have the video. We'll check out more action from the two next week.
The stakes are now as high as they get for these two political warriors. It's hard to see the loser of the contest having much of a political future --at least for a couple of cycles. All the more reason Heinrich and White are going to finish rough in the final weeks. It ain't pretty, but the day it stops getting rough for the right to sit in the United States Congress is the day you really have to worry.
The readers chime in on the downfall of former Democratic State Senator Manny Aragon and several others, who entered guilty pleas this week to federal corruption charges. Aragon could face over five years in prison.
All those who copped a plea are now admitted felons and ineligible to vote. Imagine. One of the most powerful politicians in the history of New Mexico can no longer even vote!
Another reader remembers the controversy that broke out when it was revealed that Aragon, while a Senate leader, had a big consulting contract with the private prison company Wackenhut.
Will Manny serve time in a Wackenhut Prison?
THE BOTTOM LINES
Dr. Patrick Hudson of ABQ blogs in with this rib-tickler making the rounds.
If you had purchased $1,000 of Delta Air Lines stock one year ago, you would have $49 left. With AIG, you would have less than $15 left. With Fannie Mae, you would have $2.50 left of the original $1,000. But, if you had purchased $1,000 worth of beer one year ago, drunk all of the beer, then turned in the cans for the aluminum recycling REFUND, you would have $214 cash. Based on the above, the best current investment advice is to drink heavily and recycle....It's called the 401-Keg....
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(c)NM POLITICS WITH JOE MONAHAN 2008
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